Capacity of renewable energy power plants to be increased

Leony Aurora, The Jakarta Post, Jakarta

The government will soon embark on a project to increase the maximum capacity of renewable energy power plants that can sell electricity to state power firm PLN without tender to 10 megawatts (MW) from the current 1 MW, an official says.

The small-scale power plants must use renewable energy, such as geothermal, biomass, hydropower or solar energy, the Ministry of Energy and Mineral Resources' Director General of Electricity and Energy Supply Yogo Pratomo said on Wednesday.

"PLN must purchase the generated electricity at 80 percent of the respective regional power cost, if it is connected to a medium voltage grid," he said.

A ministerial decree issued in 2002 stipulates that only power plants of up to 1 MW can be eligible for such special treatment. Pricing negotiations with PLN are usually lengthy and can take years to complete.

"We will finalize the new ministerial decree in one month," said Yogo, adding that the revision had been requested by several investors.

Indonesia is striving to increase its use of alternative energy to reduce its reliance on increasingly expensive and scarce oil.

Increased use of renewable energy, however, has been slow to come about as the state-of-art technology involved makes it more expensive than energy produced by conventional hydrocarbon-fired plants.

Despite the country's massive potential, power plants using renewable energy sources contribute only a small portion of the country's total installed power capacity of about 25,000 MW. The installed capacity of mini and micro hydropower plants is only 54 MW, while those utilizing geothermal and biomass energy have installed capacity of 800 MW and 302 MW respectively.

Located on the "ring of fire" volcano belt, Indonesia is estimated to hold about 40 percent of the world's geothermal reserves, equivalent to a total of 27,140 MW of power.

The government aims to raise the use of new and renewable energy sources in power generation from 0.2 percent currently to 4 percent by 2020.